A few years ago, applying for a personal loan took just as much time as doing your taxes. KYC compliance required a significant amount of paperwork and was regarded as a complex process. However, India's finances for consumer durables and short-term personal loans have changed over the last three to four years.
With everything available just with the touch of a fingertip, everyone is constantly in a rush and wants everything, including loans, as soon as possible. This is where the instant personal loan app comes in.
Instant personal loan apps are registered with the Reserve Bank of India and are created by NBFCs and banks. They are transforming the financial landscape using technology, and people are making the most of it. Instant small loan apps have completely hassle-free loan application procedures.
What is an instant personal loan app?
Instant loans are personal loans disbursed relatively immediately or within one to two business days. As they employ modern software and clouds to speed up processing, these loans are connected to fintech businesses.
The processing of a personal loan application typically takes 7-8 working days with most traditional lending institutions, including banks and NBFCs. However, you get it within a few hours, thanks to instant small loan apps.
Many of these lenders provide loans using mobile lending apps, which can be found on the App Store for iOS and the Google Play store for Android phones. In some circumstances, the mobile app allows you to apply for and assist in managing the loan. Although, you might need to use a computer to access the lender's website to apply.
Additionally, many lenders let you use a mobile app to check or manage current loans and payments and even change your email address, mobile number, or communication address.
Reasons how instant small loan apps disrupted the financial market
Numerous relevant reasons and factors have contributed to the rise of online loan apps in India. The following are among them:
Versatile nature of fintechs
Fintech, as it is more often known, is a term used to describe emerging technology that aims to enhance and automate the provision of financial services. It can be used for any development in commercial transactions, such as digital money or double-entry bookkeeping. And banks have used this technology.
While banks and startups have developed practical fintech applications for everyday banking activities like checking and savings accounts, bank transfers, credit/debit cards, and loans, other fintech fields focus more on personal finance, investing, or payments (among others) have become more popular.
The ability of fintechs to be more versatile, serve an underrepresented population segment or offer faster and better service has contributed to their growing appeal.
Focus shifted to online during the pandemic
Due to the pandemic, people had to shop online for most of their daily necessities. As a result, people gradually embraced online transactions, whether they were purchasing food, clothes, or personal loans, after being made to embrace digital technology.
Moreover, as consumers rushed to cover medical crises, education, home remodeling loans, working cash shortfalls, etc., the pandemic saw a jump in demand for personal loans through online loan apps.
With the simplicity, speed, and convenience of applying for a loan using an online loan app rather than enduring time-consuming procedures like completing a ton of paperwork and waiting in line, people have benefited from instant personal loan apps.
Made the lending process more transparent
Financial institutions have made their lending process more transparent by leveraging the latest technologies and automated systems. For instance, if an applicant wants to apply for a personal loan through an instant loan app, they can go through all the instructions beforehand, and if they fall short of the requirements, they will be notified instantly.
Another reason instant personal loan apps have successfully transformed the financial market is people’s trust in loan apps, as there are no hidden clauses. All the details related to the various charges, repayment tenures, pre-closure conditions, etc., are available on the lender's website.
Quick approval of loans
Another reason behind the increasing popularity of online loan apps in the financial market is that the loans are quickly approved.
Fintechs act quickly to approve or deny loan applications. Once you fill out a loan application through your trusted loan app, they review your credit report and check your eligibility based on specific criteria to decide whether you will be a reliable customer.
The majority of fintech organisations evaluate your credit profile using risk-assessment algorithms. The primary criteria on which fintech base their decisions on approvals and denials include your income, present employer, age, and credit score. Besides that, the funds are disbursed in a short period of time after you've been accepted.
Made verification simple
Fintechs have transformed everything into a digital process, including the verification procedure. So not only can you apply for a loan online, but you can also upload your supporting documentation and any other necessary information.
You will save time and work by having your documents verified digitally. Because of efficient and sophisticated methods, the verification process will be finished in minutes.
To conclude
Modernised technologies have streamlined cumbersome lending and borrowing processes as our lives become more digital. However, to enhance the customer experience, safe and secure lending becomes increasingly crucial as fintech rides the wave of technological transformation and digital innovation.
So, if you are facing issues and your personal loan application is constantly being rejected, apply using the Tata Capital app. Our app is easy to use and gives you 24x7 access to your loan account, loan details and much more.
When there’s an easy way to apply for a personal loan, then why look elsewhere? Download the Tata Capital app for a personal loan now!
11 January 2023
5 mins read
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